JAKARTA — The Indonesian government has allowed work to resume on a $40 billion project to build 17 artificial islands off the northern coast of the capital Jakarta, overturning a suspension imposed last year.

Construction activities on three of the reclamation project’s islets were halted in early 2016 following concerns from regulators and opposition from activists who said the development was causing environmental damage to the bay and destroying the livelihoods of local fishermen. The suspension also came amid a graft investigation by the country’s anticorruption watchdog, the KPK.

“Following a string of coordinating meetings between ministries and the Jakarta administration, it’s decided that the North Jakarta Bay Reclamation no longer has any issues, either with its technical or legal matters,” said Luhut Binsar Pandjaitan, the coordinating minister for maritime affairs, in a memo signed on Oct. 5.

In addition to prompting protests from environmentalists and community organizations, resuming the project could stir up new tensions between the national government and Jakarta’s newly inaugurated governor, Anies Baswedan, who pledged during his campaign to stop the multibillion-dollar plan.

In an earlier statement, Anies, a former education minister, promised to “put a halt to the Jakarta Bay reclamation in the interests of environmental conservation and the protection of fishermen, waterfront communities and all of the people of Jakarta.”

Luhut, however, said the reclamation project would resume despite the governor’s objections.

“Just because you’re a new government official, you can’t go and make changes as you please,” the minister said as quoted by local news outlet Kompas.

An illustration showing the 17 artificial islands to be built under the Jakarta Bay reclamation development project. Image courtesy of FISIP Universitas Indonesia.

Kickbacks

Work on two of the artificial islands, known as Islets C and D, was suspended in May 2016 after the Ministry of Environment and Forestry said it had identified several environmental violations.

According to the ministry, project developer PT Kapuk Naga Indah (KNI) failed to identify from where it would quarry the sand to build the islets. The ministry also discovered increased sedimentation in the vicinity of the islets due to the developer’s activities.

The ministry subsequently ordered the company to cease construction, resolve the issues, revise its environmental impact assessment (EIA) and conduct environmental management during the suspension.

Last month, less than a year and a half after the suspension was ordered, Environment Minister Siti Nurbaya Bakar told reporters that her office had allowed construction to resume because PT KNI had carried out the required measures.

The development of a third island, Islet G, was temporarily halted in April 2016 by Luhut’s predecessor, Rizal Ramli.

The suspension was ordered amid a corruption scandal involving property giant PT Agung Podomoro Land (APL), the parent company of Islet G developer PT Muara Wisesa Samudra (WMS). Ariesman Widjaja, at the time a director at PT APL, was charged with giving Jakarta city councilor Muhammad Sanusi a 2 billion rupiah ($148,000) kickback to help bypass spatial planning regulations for the reclamation project.

In October 2016, a high court in Jakarta ruled the reclamation project could resume. However, Environment Minister Siti called for several revisions to the environmental documents prepared by PT WMS before allowing work to continue on Islet G.

A key concern came from the state electricity company, PT PLN, which operates a power plant that draws water from the vicinity of Islet G. The development of the island was expected to raise the water temperature in the area, thus disrupting the power plant’s operations.

According to Minister Luhut’s Oct. 5 memo, though, these issues have since been resolved. The developer has revised its environmental assessment and agreed to build a system to regulate the water temperature so that the PT PLN plant can continue operating without any problems.

“All administrative requirements have been completed by the developer of the island,” Luhut said.

Construction taking place on Islet G. A recent ruling has cleared the way for work to continue on the land reclamation project. Photo by Sapariah Saturi/Mongabay-Indonesia.

That sinking feeling

Jakarta, one of the world’s most densely populated conurbations on Earth, with more than 30 million people packed into the metropolitan area, is experiencing a higher rate of land subsidence than any other city. Some areas are sinking by 25 centimeters (9.8 inches) a year due to subsidence from groundwater extraction, leaving 40 percent of the city lying below sea level.

To save the capital from being inundated by seawater, the national and city governments kicked off the so-called Giant Sea Wall project in 2014, a major component of which is the construction of the artificial islands, where property developers plan to build shopping centers, apartment blocks and more. Since the start, however, the plan has been marred by lawsuits, scandals and controversies, including forced evictions of traditional fishing and waterfront communities to make way for the project.

The government’s most recent decision to lift the suspension has been welcomed by the Indonesian Employers’ Association (Apindo), the country’s biggest business lobby. “There will be new land and new economic growth,” said Apindo chairman Hariyadi Sukamdani, as quoted by state news agency Antara.

For environmentalists, the main concern is the impact from the massive sand quarrying and coral mining needed to feed the construction of the new islets. A 2015 study by the Maritime Affairs and Fisheries Ministry warned the project would damage the marine ecosystem and lead to the erosion of nearby islands due to shifting currents.

Researchers have also raised concerns that the sea wall would trap and concentrate sedimentation and pollution from the city’s 13 rivers, further degrading already threatened fisheries and coastal habitats.

Fishermen attempt to shut down Islet G, an artificial island at the center of the controversy related to the Jakarta Bay land reclamation project. Photo by Sapariah Saturi/Mongabay-Indonesia.

Ony Mahardika, campaign manager for the coast, oceans and small islands at the Indonesian Forum for the Environment (Walhi), an NGO, accused the government of failing to be transparent about the project’s environmental impact assessment before lifting the suspension.

“Civil society must be involved in the environmental impact assessment process,” he said. “We believe that the EIA has procedural and legal defects.”

The impact has also been severe for the fishing communities that have inhabited Jakarta’s coastline for generations but were evicted to make way for the project. The Indonesian Traditional Fishermen’s Union (KNTI) estimates the project will cost fishing communities over $2,000 per year for every hectare of seabed reclaimed. The Coalition to Save the Jakarta Bay, another NGO, pegs annual losses related to the project at IDR 178.1 billion ($13.2 million), accounting for the loss of fishing revenue and ecosystem services, increased flood risk, and reduced electricity generation at nearby power plants.

Susan Herawati, secretary general of the People’s Coalition for Fisheries Justice (KIARA), told Mongabay-Indonesia that her organization and the Coalition to Save the Jakarta Bay would take legal steps to challenge the government’s decision to lift the suspension on the reclamation project.

“We will prepare the papers, and in the short-term, we will go for a judicial review,” Susansaid.

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